New York Attorney General Orders Uphold to Pay Over $5 Million in Restitution for False Advertising of Crypto Savings Product

New York Attorney General Letitia James announced that crypto platform Uphold has been ordered to pay over $5 million in restitution to affected users for promoting CredEarn, a fraudulent crypto savings product. The investigation revealed that between January 2019 and October 2020, Uphold marketed CredEarn, offered by Cred LLC, as a "safe and secure" high-yield savings product, promising users it was "fully insured." However, Uphold failed to disclose that the returns actually came from issuing high-risk, small-dollar loans to low-income gamers in China, and that no such insurance coverage existed.The New York Attorney General’s office further noted that Uphold did not obtain the necessary broker or commodity broker-dealer registrations while promoting the product. After Cred filed for bankruptcy in 2020, many users suffered losses. Under the settlement, Uphold will directly pay $5 million in restitution to harmed users. Additionally, any future funds Uphold recovers from Cred’s bankruptcy proceedings, totaling $545,000, will also be returned in full to the affected investors. (ny.gov)